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Investing in the UK

Hurst & Wills hosted a series of educational events across South Africa this March to address the growing popularity of the UK property market, the current window of opportunity that has opened up with the devalued pound, and the development of new strategies for UK property investment.

Of those who invest offshore, 38% of South Africans choose to do so in the UK. This is not surprising, considering that returns from the UKs residential market have outperformed gilts, equities and commercial property for the last 30 years. South Africans have strong affiliations with the UK, and the legislative system is fairly straightforward, with a stable economy and trusty governance, so it’s easy to see why the country is a popular investment choice.

Whilst the UK has always been a hit with the South Africans, it is important that both investors starting now and those who have invested over the years and continue to do so recognise that the market has evolved.

Changing times

Traditionally, those investing in the UK did so through residential Buy To Let investments, with many investing in high yielding Houses of Multiple Occupancy. However, with changing tax laws and newer generations’ changing attitudes, these strategies are becoming less effective.

Now, there’s a new kid on the block. This new sector, called Build To Rent addresses the housing shortage in the UK. With the country currently suffering under-supply, the government has confirmed the need for up to 270,000 new homes a year to satisfy demand. In recent years, savvy developers have set about plugging the gap.

Understanding the changing attitudes of UK renters is crucial to any investor. Most young professionals in the UK now rent instead of buying, and by 2025, it is expected that 60% of 25-39 year olds will do so. This market seeks modern developments close to their workplace or university, with in-house concierge, gyms, media rooms, designer fittings and fast internet.

The South African tax system has also changed, so considering the way investments are planned and structured is a crucial part of your success. The South African economy and the country’s political uncertainties are also important factors in the need to re-evaluate offshore investment techniques.

Our recent event unpacked these issues, assisting those wanting to invest offshore by keeping them up to date with the latest trends, investment hotspots and offering tips on how to go about investing. Attendees were offered a chance to ask questions and to put their personal objectives and concerns to a panel of experts in order to gain a well rounded view of how best to invest in the exciting UK property market.

Hurst & Wills prides itself on independence and fluidity. Each client’s investment strategy is unique. They must consider their personal wealth objectives, their tax scenario, how to structure their portfolio and their family’s exit strategy. As independent advisors, it’s our job to make sure that our clients have a full team of experts behind them so that they can make informed decisions. We have joined forces with a team of experts for our events in order to offer our clients a holistic approach to property investment.